Private equity investment to back fast-growing Columbus technology firm's expansion
January 16, 2018
This article was first published by Columbus Business First
Pillar Technology Group LLC could add an autonomous vehicle lab in Columbus and expand its Forge digital think tank to as many as five more cities, thanks to a private equity investment.
NewSpring Capital, based in suburban Philadelphia, invested in Pillar from its fund dedicated to mezzanine financing, which is a hybrid of debt and equity. The firm declined to disclose the value of the investment, but the fund typically invests $5 million to $25 million.
“One of the biggest things we invest in is a management team," said Greg Barger, NewSpring general partner. “We were extremely impressed with the overall feeling of being in there: You could tell people loved being there and were very engaged. It was a vibrant work space and they have blue-chip customers.
“Talking to their customers and what they think of them, it was really impressive.”
The financing comes after a year of 30 percent growth for Columbus-based Pillar, which had $52 million in revenue for 2017 and is aiming to continue at the same trajectory to top $75 million this year, CEO Bob Myers said.
"We’re doing really crazy, incredible work for a lot of different customers," Myers told me. "Digital is everything, so people have to get viable digital offerings into the marketplace quickly.
"There’s a level of sophistication around technology now that is raising the bar as far as those who can deliver and those who can’t."
Pillar is to become anchor tenant on the top floors of the 711 N. High St. building when construction is complete. The financing could allow it to add the lab for connected and self-driving vehicles, Myers said, and possibly keep its original Forge at the Smith Bros. Building on N. 4th Street.
The company added 47 jobs in Columbus last year and expects another 50 local hires in 2018. Pillar currently has 163 Columbus employees, half its companywide 320; another 80 new jobs are expected in other markets this year.
Forge is the firm's innovation center concept, where clients and outside groups meet to brainstorm projects. The architecture and design – down to wall colors – are meant to inspire creativity.
NewSpring's investment also will go into product development, such as Loop, a device and software combination Pillar developed to help speed the testing of iterative developments of connected devices in the Internet of Things.
"We’re opening up four to five new Forges across the country," Myers said.
Pillar has satellite offices with Forges in Ann Arbor, Michigan; Des Moines, Iowa; and Palo Alto, California. New markets will be determined by clients, available resources and whether they're emerging markets. Locations could include Raleigh, Atlanta, Kansas City and others in the Plains and West.
NewSpring passed $1 billion in returns over its 18-year history last year and has more than $1 billion under management. Among its biggest wins was the turnaround of NutriSystem Inc. after the firm invested just less than $10 million 15 years ago.
Deloitte was Pillar's investment banking firm to screen and structure financing.
"I would get at least one email a day from private equity or venture firms asking if they could talk to us about getting us money," Myers said.